Item 5 – Fees and Compensation
High Road and its related persons receive fees based upon the amount of capital investors have committed to the Client
Fund or the amount of capital invested by the Client Fund as well as performance-based fees (carried interest), all as
described in the Fund Documents. High Road and its related persons receive other compensation and reimbursements
of expenses, as described further below. The specific payment terms and other conditions of these fees and
distributions are set forth in the Fund Documents.
Management Fee
Each Client Fund pays HRCP a management fee that is calculated as follows:
1. during the investment period (generally from the period beginning on the date of the initial closing and
ending on the fifth anniversary of the final closing), or a period terminating on an earlier date based on a
specified percentage of capital commitments being drawn down or by election of the investors as set forth in
the Fund Documents - 2% of aggregate capital commitments as more fully described in the Fund Documents;
and
2. after the period set forth in (1.) above - 2% of aggregate funded capital commitments for portfolio
investments less the amount of distributions made to the investors as a return of capital on realized portfolio
investments as more fully described in the Fund Documents.
As set forth in the Fund Documents, the management fees are determined and paid quarterly in advance by the Client
Fund. The management fee is paid through capital calls made to investors for the amount of the Client Fund’s
management fees as may be adjusted by applicable offsets described in the Fund Documents. The General Partners
direct such funds to be deposited in the account of the Client Fund and subsequently paid to HRCP. Investors are
generally not permitted to withdraw from the Client Fund (except in limited circumstances as set forth in the Fund
Documents) such that a fee is generally not required to be refunded prior to the end of a billing period. No management
fee shall be payable subsequent to the expiration of the term of the Client Fund, as defined in the Fund Documents.
The Client Fund also will likely indirectly incur other fees (or expenses) payable (or reimbursable) to High Road or
its related persons. For example, transaction, monitoring, advisory, break-up or other similar fees (“Fee Income”) have
been paid and will likely be paid in the future to HRCP and its related persons by a portfolio company or prospective
portfolio company or other third parties in connection with the acquisition, holding or refinancing of, or add-on
acquisition related to, these entities. Fifty percent of the Fee Income received by HRCP or its related persons is treated
as an offset against the management fees next payable. Offsets are carried forward if necessary.
Performance-Based Fee (Carried Interest)
The General Partner is allocated a carried interest distribution based on cash generated from the sale of the Client Fund’s
portfolio investments. The carried interest distribution will generally be an amount equal to 20% of the profits from
each portfolio investment made by the Client Fund after the return of invested capital and a preferred return to
investors. Carried interest allocations are subject to a claw-back based on the aggregate performance of all portfolio
investments of the Client Fund. All performance-based fees (carried interest) payable to the General Partner and related
persons in connection with the private equity fund sponsored by High Road will be effected consistent with the
requirements of Section 205 of the Investment Advisers Act of 1940 (the “Advisers Act”), Rule 205-3.
Fee Waivers/Reductions
Certain investors of the Client Fund may in the future negotiate different management fees and carried interest terms
than those set forth in the Fund Documents (through side letters). In addition, in accordance with the Fund Documents,
in its sole discretion, the General Partner may elect to reduce part or all of the management fee that is otherwise
payable pursuant to the terms of the Fund Documents (including the General Partner’s ability to elect to fund a portion
of their capital contributions by waiving a portion of the management fee).
Participating in Subsequent Closings
Investors in the Client Fund admitted at any closing after the initial closing are required to pay the Client Fund, on a
date designated by the General Partner, an amount equal to a portion of their respective capital commitments that
would have been drawn down had those persons been investors from the time of the initial closing (plus interest). This
amount will include the investor’s proportionate share of management fees, fund expenses and original costs of the
Client Fund’s portfolio investments.
Indemnification
Under certain circumstances specified in the Fund Documents, the Client Fund is generally obligated under the Fund
Documents to indemnify High Road, its affiliates (other than a portfolio company or any other person in which the Client
Fund have a direct or indirect interest), and any of their respective controlling persons, officers, directors, partners,
shareholders, members, managers and employees (including former employees), and any member of the advisory
committee. Investors may be required to fund undrawn commitments and, subject to certain limitations, to return
distributions received by them in order to fund the Client Fund’s indemnification obligations or other liabilities.
Other Fees and Expenses
Fund Expenses
HRCP is responsible for all usual overhead expenses of managing the Client Fund, including compensation for High
Road’s employees. The Client Fund bears its organizational costs (including the out-of-pocket expenses of the General
Partner, High Road and their agents, but excluding placement agents) up to an amount specified in the High Road Fund
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